Cisco Planning To Acquire Skype

rexjoec writes "Cisco is making a bid for Skype. The deal, if successful, would derail a planned initial public offering from Skype and redraw the battle lines in the lucrative market of video communications." The rumored price is $5B.

Comments

Cisco Planning to Squash Another Competitor

[wshs]

They do this with pretty much every company they buy. Psionic and Riverhead come to mind quickly for me. The only reason they kept the Linksys brand was because they had no competing product at the time.

Re:Cisco Planning to Squash Another Competitor

[Kepesk]

Buying up companies at a frantic pace seems to be the hot trend among powerful corporations.

Soon there will only be two corporations: Microsoft-Cisco-Skype-NBC-Pepsi-McDonnalds-Halliburton-Friskies Corp and Apple-AOL-Time-Warner-CBS-CocaCola-BurgerKing-BP-FancyFeast Corp.

Then you'll start getting weird messages on your computer... "You better not buy Fancy Feast." "We saw you drink that Pepsi."

Re:Cisco Planning to Squash Another Competitor

[mlts]

The reason companies do the buying is that R&D is so heavily penalized in the US, due to tax breaks, liability, and other things. If a small company puts out a product, it is better to wait to see if they face lawsuits, then buy them if nothing happens as opposed to creating a product for a new market.

Plus, American companies are shackled to the fact that they have to make a profit quarter per quarter, or shareholders can sue the company in the ground. Buying a company is a lot easier to explain to the accountants and board members as opposed to charging off some chunk of change for a R&D facility for new products that won't have an ROI for 5-10 years.

Re:Cisco Planning to Squash Another Competitor

[TooMuchToDo]

The problem is cash sitting around doing nothing. NPR was running a story yesterday talking about how the top 120 companies have over $1 trillion of cash sitting around, and investors are demanding they either distribute it to them via dividends or invest it via mergers and acquisitions. So, yeah, if it's either earning 0.5 percent in a money market account or buying up a ton of relatively cheap companies with the potential for a much larger return, you go on a spending spree and buy up whatever you think is going to have a decent ROI.

Re:Cisco Planning to Squash Another Competitor

[Archangel Michael]

Google Voice (aka Grand Central),
Google Chat, now with phone dialing (PC to PC, PC to Phone VOIP)
Gizmo5 (Acquired last year)Voip Telephony Company
Adroid Phone

Google has ALL the pieces needed to make a serious run at SKYPE, which is why SKYPE is running to Wall Street now looking for IPO or White Knight, IMHO. SKYPE ought to be scared, because they don't have the bulk and push Google does.

And Google doesn't have to sit on Gizmo5 much longer, if they are working towards integration of the four. The pieces are almost there for the first and complete VOIP end to end network, with Cell as backup.

THAT is just how I see it.

Re:Cisco Planning to Squash Another Competitor

[pclminion]

Plus, American companies are shackled to the fact that they have to make a profit quarter per quarter, or shareholders can sue the company in the ground.

And I have to make monthly mortgage payments or the bank will take my house away. See me complaining?

If you don't want to be shackled by shareholders, don't trade your shares publicly. As a public company you are subject to the investing acumen and superstitions of the general public -- you're basically taking a loan from thousands of "John Smiths." And of course these people just want to see profitability in the short term.

If I came in here bitching about losing my house because I couldn't keep my creditors happy, you'd tell me to grow up, and if I didn't want to be subject to their whims, maybe I should finance my home myself. But when the same thing happens to a corporation you pity the poor little corporation. Weird.

Did Google see this coming...

[onionman]

Certainly seems like Google saw this coming from a long way off given that they have been working hard to integrate Skype-like features into gmail.

It makes me wonder how many Cisco/Skype executives were using gmail accounts...

Re:Not sure how I feel

[jgagnon]

At least it wasn't Oracle... :p

Re:Not sure how I feel

[davester666]

Is the company you work for that cheap that you have to share a desk and phone?

Or are you at home?

This just in...

[countSudoku()]

Reports are surfacing that Oracle and Cisco attempted to purchase each other this morning and were destroyed in the clash. A very perturbed Larry Ellison had this to say; "When I saw they tried to purchase US I fell over into my zen rock garden and bumped my head pretty bad on a large decorative boulder." A spokeswoman for Cisco remarked; "They got database software all up in my router!" to which Larry replied; "Well, you got router all over my new Sun hardware biz!" Film at 11... AM, then lunch.

Re:iPhone by Cisco?

[Luckyo]

Skype already had a working implementation on the world's biggest mobile plarform, as symbian application called fring allowed you to essentially tunnel into your skype account and make phone to pc, pc to phone and phone to phone video calls on any symbian mobile phone with front facing camera (which is pretty much any decent nokia made in the last 4 years).

At some point, folks at skype decided that they didn't want to be a source for free video calls over 3g and blocked fring. But to actually need to make a phone when all you need is to allow integration into already existing phones for money... why?
Video calls already worked for mobile phones over skype for a while (and apparently work again over fring itself as it added the functionality recently, but fring still seems to lack PC endpoint application). They could probably set up a small charge for every time you video call a phone with data connection, though I suspect that they have to hurry before one of the small start ups like fring grabs enough of the market and becomes skype of the mobile world.

Consider This.....

[Atomm]

Cisco has a huge install base for business VoIP. Most of those businesses connect to land lines via traditional T-1 circuits. If Cisco integrated the Skype infrastructure with all those business customers, they could route calls over the Skype network bypassing the Telco's. From what I have seen, the average business long distance rate is 2-3 cents a minute. Cisco could charge 1 cent a minute and still make a fortune because they have such a large base of customers.

Now, what if they did the same for International calling?

I think it's going to move Skype away from Consumers and into the Business world where the real money is.

Re:Probably a good fit

[Wumpus]

Somebody is going to make around $3 billion on this, but it isn't going to be eBay, who sold Skype last year for $2 billion, which was less than what they paid for the company when they bought it.

Re:Privacy Concerns?

[wshs]

This is where CALEA comes into play.

Re:iPhone by Cisco?

[Cyberax]

Skype is notoriously difficult to block. It uses all kinds of evasion tactics (culminating in HTTPS tunneling).